City officials to discuss sales taxes, borders at Legislative Breakfast on Monday

By Jason MortonStaff Writer

Published: Sunday, January 27, 2013 at 3:30 a.m.

Last Modified: Saturday, January 26, 2013 at 9:22 p.m.

TUSCALOOSA | City officials will urge local legislators to oppose any legislation that will streamline sales tax collections statewide during their annual Legislative Breakfast on Monday.

The concern is rooted in a growing push for national rules to require that sales taxes are collected from every online purchase.

Now, sales taxes are not collected on web-based transactions with businesses that have no brick-and-mortar building within the area from which the purchase was made. This means a purchase made by someone in Tuscaloosa on Amazon.com is not charged sales tax, but one made at BestBuy.com would be taxed.

Alabama law says people who make online purchases from businesses that don’t collect sales tax should calculate the tax and pay it on their income tax return.

But with no mechanism to enforce the provision, few report it.

According to Gov. Robert Bentley’s office, this loophole costs Alabama about $300 million a year, city officials said.

Securing these lost tax dollars is a worthy goal, but the current plan, city officials said, would centralize sales tax collections at the state level, thereby preventing local revenue collection efforts from monitoring the businesses that fall within its jurisdiction.

And in addition to removing Tuscaloosa’s ability to ensure that local sales taxes are properly collected, it would force businesses to take questions related to tax collections to a state agency.

“Ultimately, I think it will cause more confusion within our business community,” said Mayor Walt Maddox.

This is one of the 20 items the City Council adopted last week in its local legislative agenda. This compilation of anticipated laws and bills that the council either endorses or opposes, as well as other matters it wants to see addressed during the regular session, will be formally presented to the local delegation during the annual breakfast held at the Tuscaloosa River Market.

Also on the agenda is Tuscaloosa support for altering a portion of the boundary separating Tuscaloosa and Northport.

Shifting Tuscaloosa’s border from the northern edge of the Black Warrior River to the waterway’s midpoint was approved by the City Council last month after Northport officials and state Rep. Alan Harper, R-Northport, made the request.

Usually, when two municipalities border one river, the jurisdiction for each ends in the middle of the water. But for a nearly one-mile span of the Black Warrior River near Northport’s historic downtown, the city of Tuscaloosa’s border ends on the northern shore of the Black Warrior River.

Harper and Northport City Administrator Scott Collins asked the Tuscaloosa City Council to go along with the change because the current border would not allow Northport to benefit from any riverfront development that extends from its jurisdiction into the river, such as a marina or private boat dock.

Other items on the agenda include extending legal liability limits to those sued in their individual capacities as part of lawsuits against municipal employees. These limits of $100,000 per person, per offense or a total of $300,000 in the event of widespread offenses are offered only when those employees are sued in their official capacities.

The City Council also would like to increase the amount City Hall and police officers and firefighters contribute to the Tuscaloosa Fire and Pension Fund by 0.25 percent of the employee’s salary. Because the fund was established by the Legislature in the 1950s, any changes to it must be approved at the state level.

To eliminate complaints from unsuspecting buyers and renters, the council supports legislation that would require sellers or landlords to disclose the occupancy limitations for which the property is zoned.

Officials said it’s common for residents to purchase a home with the intention of converting into rental property only to learn after the deal is closed that the number of unrelated persons who can live under one roof is regulated by city law.

Other items include:

- Opposition to any legislation adverse to the city’s water and sewer operations.

- Support for Lake Tuscaloosa extra-territorial zoning.

- Opposition to drug sales exemptions from the gross receipt total that is used to determine business license fees.

- Support for adequately funding the state General Fund budget to eliminate unfunded mandates for municipalities.

- Opposition to legislation that would redistribute tax proceeds collected from the sale of beer across Tuscaloosa County.

- Support for legislation to bolster tornado recovery efforts.

- Opposition to limitations on business license fees.

- Support for extending law enforcement immunity to tactical paramedics.